Unanimous support - approval odds?
Optimer pharmaceuticals (OPTR) has a PDUFA action date on May 30. Its investigational antibiotic, fidaxomicin, already had full support from the FDA advisory panel. How likely will it be approved? Let's look.
Optimer pharmaceuticals (OPTR) has a PDUFA action date on May 30. Its investigational antibiotic, fidaxomicin, already had full support from the FDA advisory panel. How likely will it be approved? Let's look.
Below is a quick list of companies whose drug candidates were unanimously recommended by the FDA advisory panel for approval during 2010-2011. The panel meeting dates, vote results, and final FDA decisions are provided.
AstraZeneca plc (AZN) 12/2/10, 10-0 for approval, approved (4/7/11)
Bayer AG (BAYRY.PK) 1/21/11, 16-0 for approval, approved (3/15/11)
Valeant Pharmaceuticals International (VRX), 8/25/10, 13-0 for approval, CRL (12/1/10)
Thera technologies (TH.TO) 6/10/10, 16-0 for approval, approved (11/11/10)
Boehringer Ingelheim (non-public), 10/6/10, 9-0 for approval, approved (10/19/10)
HRA Pharma (non-public), 6/16/10, 11-0 for approval, approved (8/13/10)
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| 5/6 companies with full panel support ultimately received approval |
As you may already discern, 5 out 6 (83%) of these companies, whose experimental drugs were collectively agreed upon by the members of the FDA advisory committee as being safe and effective for patients, ultimately gained an approval from the US drug regulator. Will OPTR be added to the list of successful companies granted a drug approval on May 30? While the FDA is well known for being extremely unpredictable in its rulings, often evaluating multiple factors such as labelling, REMS, safety, and efficacy altogether, I believe OPTR does have a 83% chance of seeing FDA's nod with its experimental antibiotic, fidaxomicin. Therefore expect people to buy the dips any time between now and May 30.
My June $15 calls are up 88% and $17.5 calls up 34% so far and I plan to hold them through until next week.
My June $15 calls are up 88% and $17.5 calls up 34% so far and I plan to hold them through until next week.
Disclosure: June $15 and $17.5 calls
I also own $15 and $17.5 June calls, but I'm thinking of selling all except for some $17.5 June calls before PDUFA, as approval may mostly be priced in already. Also thinking of selling some $20 June calls, as I don't see OPTR moving up much past $18 on approval. What do you think?
ReplyDeleteI actually don't think that OPTR has a chance to go beyond $15 pre-PDUFA and beyond $17 post-PDUFA. I also agree that approval is priced in already, and therefore the downside potential may actually be greater, even on approval. I sold all my $17.5 calls today. Still holding $15 calls and will likely hold through PDUFA. Don't forget to consider a sell-off post-PDUFA.
ReplyDeleteSelling June $20 calls sounds like a great idea. Post-PDUFA price should peak around $16.
ReplyDeleteFollow me at Twitter id: blackchaos801
ReplyDeleteI really like your options but I'm new at profit.ly. Don't understand if those posts are after or before a trade.